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A Wellness Stipend Guide For Employee-First Companies

A wellness stipend is a great way to care for employees and bolster your employer brand. Here's everything you need to know.

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There are few positives to come out of the global pandemic, but increased awareness of employees’ health and well-being is one of them. The global health crisis forced HR leaders to become overnight experts in psychological health and find creative ways to support their workforce, both inside and outside of the office. 

The result? Employers now demonstrate commitment to their employees by offering wellness stipends as part of their benefits package. These are taxable benefits paid to employees to cover healthy living and wellness-related expenses. Some employers provide lifestyle spending accounts or wellness reimbursement plans to fund this benefit type, separate from health benefits. In either case, the aim of this allowance is to provide an assortment of physical and mental health initiatives that support each employee’s unique wellness journey at any stage in their life and career. 

This guide outlines the main benefits of investing in wellness programs, what to include in your wellness stipend, and how to design a successful program that supports your entire workforce. 

4 key benefits of wellness stipends

Offering wellness reimbursement or stipend plans boosts the chance that your employees are holistically healthy. Expect the following benefits when all four quadrants of physical, mental, social, and financial health are in perfect harmony: 

1. Improved employee health and well-being

72% of employers recognize that stress and burnout are current concerns for their organization due to the aftermath of the pandemic, societal unrest, political polarization, climate change, macroeconomic conditions, and more. 

Companies offering wellness stipends support their employees in handling these large-scale threats and enable them to access services or activities important to their physical and mental well-being. A well-rounded package will include access to fitness services; this is important because studies find that exercise improves self-esteem and cognitive function

2. Increased employee engagement and productivity

A recent MetLife study found that holistically healthy employees are 74% more likely to be satisfied with their current job, 59% more likely to feel engaged, and 53% more likely to be productive. Nadia Harris, Founder of Remote Work Advocate, explains that building a supportive workplace that focuses on well-being isn’t rocket science — it’s about listening to what employees need: 

“It’s not a modern office or free Friday cocktails that improve productivity, engagement, and retention. Just provide people with workplace flexibility and care about their everyday needs. That’s how you’ll build a genuine company culture everyone will commit to.” 

3. Reduced absenteeism and healthcare costs

The U.S. workforce has an increasing absenteeism problem. BLS data reveals that 7.8 million workers experienced an illness-related absence from work in January 2022, up 110% from 3.7 million in the year prior. Employees who are supported holistically are 74% more likely to be resilient, meaning they’ll bounce back from minor illnesses and take fewer unplanned days off. 

4, Enhanced employee retention 

An attractive wellness stipend has the power to attract and retain top talent. Kelly Tucker, Managing Director of HR Star, breaks down how the recruitment landscape has changed to match employee demand.  

“Anyone working in recruitment will tell you that people’s expectations have massively changed. If you’re not an employer being transparent about looking after your people, you will not be able to attract and retain the best. People have a basic expectation that their employer will care about and have access to platforms that enable them to be well.” 

This is an initiative that will pay off in the long term. MetLife confirms that 51% of holistically supported employees are more likely to still be with their organization in 12 months, saving your business thousands of dollars in recruitment costs. 

Types of wellness stipends

Tailor your wellness stipend program to your company culture and the needs of your employees by adding some of these popular stipends to your package.

Types of wellness stipends

Fitness stipends

Physical health and exercise benefits can be something other than the on-site corporate gym memberships you’d associate with enterprise employers. A modern-day fitness allowance includes access to: 

  • Wearable fitness trackers such as smartwatches
  • Fitness classes such as cardio, strength training, spinning, or yoga classes
  • Apps and subscriptions for virtual workouts such as Peloton or Fitbit 
  • Fitness equipment such as weights, mats, or athletic clothing  
  • Personal training sessions for 1:1 exercise 

Example: Crisis Text Line worked closely with Benepass to develop a mental and physical health perks program, including meditation apps, fitness memberships, and athletic apparel.  

Mental health stipends

Ensure your employees feel mentally balanced both inside and outside of work. Some of the following benefits will proactively protect psychological health, while others should be available when employees require extra support or are going through a crisis. 

  • Telehealth services such as therapy sessions or psychiatrist consultations 
  • Crisis helplines for 24/7 access to support 
  • Mindfulness and meditation apps such as Headspace or Sleepio Wellness programs
  • Online cognitive-behavioral therapy to develop coping mechanisms for issues with anxiety and addiction 
  • Stress management programs to build resilience and help employees cope with day-to-day workplace pressures 

Example: Mindbody has built a wellness perk program called Be Well, which includes extensive mental health support such as therapy and counseling, apps, coaching, and relationship therapy.   

Nutrition stipends

Support your employees in maintaining a healthy weight and following a nutritious diet. Motivate them to ditch the traditional office lifestyle of take-out breakfasts and lunches, opting instead for  fresher options:

  • Meal delivery services like Hello Fresh, Blue Apron, and Sun Basket
  • Vouchers for grocery delivery or local health food stores
  • Membership cards for healthy eating restaurants
  • Weight loss programs to track progress in a supportive environment 
  • Health supplements or vitamins to bolster the immune system 

Example: Wix partnered with Benepass to provide an equitable food stipend covering meal delivery, groceries, weekly dinner subscriptions, and local restaurants.

Alternative therapy stipends

Encourage your employees to focus on healing their bodies and minds through alternative therapies. Consider adding some of the following to your stipend: 

  • Massage therapy to reduce tension, stress, and muscle pain 
  • Holistic healing, such as energy work, reflexology, or Reiki
  • Chinese medicine, such as acupuncture to decrease inflammation, fatigue, and mental stress 
  • Ayurvedic remedies for a range of psychological and physical ailments   
  • Chiropractic treatments to improve posture, physical performance, and mobility

Example: Seres Therapeutics worked with Benepass to personalize its perks program, adding a spa, beauty, and massage category alongside other mental health and nutritional wellness options. Matt Sanborn, Senior Manager of Benefits, explains: 

“People love having massages. That’s always something you want to get for yourself, but at the same time, you’re like, ‘Is that the best use of my money?’ When you have this bucket carved out that’s supposed to be used for things like that, people are more apt to do that.” 

Financial health stipends

Financial insecurity is a significant source of stress. Many employees find it hard to concentrate on their daily work when living paycheck to paycheck, struggling to pay the bills, and feeling anxious about affording a comfortable retirement. Your financial wellness stipend might include:

  • Financial education workshops to teach employees about their taxes, 401k options, and more 
  • Digital financial education for access to online resources and robo-advisors at the touch of a button 
  • Financial coaching for 1:1 contact with a Certified Financial Planner (CFP) to discuss individual circumstances 
  • Budgeting apps linked to your bank accounts to easily track your incoming salary and outgoing expenses
  • Student debt repayment so employees can pay down debt, reduce loan-related stress, and progress toward other financial goals 

Example: Bright Health recently expanded its BrighterHealth benefits offering to include student debt repayments at no extra cost to the company. 

Curious about the other types of stipends you can offer to employees? We put together a guide to employee stipends to provide an overview of this popular employee benefit and offer inspiration as you design your stipend program. Download the guide to learn about the types of stipends available and how to design a successful program.

A Complete Guide to Employee Stipends: 14 Ideas With Tips and Best Practices

Designing a successful wellness stipend program

There’s no one-size-fits-all approach to creating a wellness stipend. But there are some sensible steps you can take to develop a program that works for your employees’ evolving needs. 

1. Identify the wellness needs of your employees

Recognize your employees as individuals. Understand that your workforce includes people of different races, genders, backgrounds, pay levels, family situations, and health requirements. Rather than prescribing set perks across the board, empower your employees by giving them access to the specific wellness benefit expenses they need. 

Example: A new Bright Minds Wellness Barometer study confirms that 92% of employees feel stressed about their finances. 64% of workers state this stress has impacted their relationships, and three-quarters have passed up social opportunities. 

Run employee benefits surveys to determine the most important benefits to employees and craft your benefits around these results. 

2. Set your stipend budget

Benefits make up around one-third of the average employee compensation package. Within this bucket, determine how much to set aside specifically for wellness compared to health insurance, retirement planning, and mandatory benefits. 

Consider the following as part of your budget: 

  • How much money you’re wasting on unused current benefits 
  • Administrative costs of your wellness plan 
  • Implementation fees if setting up a new platform 
  • Foreign exchange fees, especially for distributed teams 
  • Annual price increases 
  • The potential for employee forfeiture (money back in your pocket if employees don’t use their stipend) 

3. Select your program goals

Your goals should be both ambitious and achievable while in alignment with your company values. For example, your goals might be: 

  • Improving employee engagement 
  • Increasing access to health and wellness services 
  • Reducing absenteeism 
  • Improving your quality of hire 
  • Boosting employee retention rates

Use the SMART method to build your wellness stipend goals, ensuring they’re Specific, Measurable, Attainable, Relevant, and Timely. 

4. Benchmark your program against competitors 

If recruitment and retention are two of your top priorities, it’s essential to check out what competitor employers are offering. 

Our Benepass Benefits Benchmarking Guide takes the legwork out of the research. Download it to understand how companies approach wellness stipends. The guide includes a deep dive into the following industries:

  • Tech
  • Healthcare and life sciences
  • Retail
  • Financial services
2023 Benepass Benefits Benchmarking Guide

5. Ensure program accessibility and inclusivity 

Personalization is a strong theme in the current benefits space. You can’t expect a 59-year-old male approaching retirement to have the same wellness experience as a 29-year-old female keen to start a family. 

Ensure your program is accessible and inclusive to all by providing flexibility in your benefits package. Wellness spending accounts are key to improving employee wellness by offering eligible expense categories covering a range of physical and psychological health activities. Employees can choose the wellness benefits that make the most sense to them. 

6. Communicate your wellness program to employees

Review the delivery of your benefits, and check that your employees understand how your wellness stipend works and the value it provides. Explain your program’s tax implications, and ensure they know how to access additional information if needed. 

Finally, communicate the importance of wellness and the resources available to employees. This will motivate your employees to take advantage of their benefits, ultimately improving employee engagement and satisfaction. 

For a deeper look at setting up a flexible stipend, including program design tips, vendor checklists, and ROI calculations, download our eBook Launching a Competitive Lifestyle Spending Account: 7 Steps for Success.

How to Launch a Competitive LSA: 7 Steps for Success

Overcoming challenges in implementing a health and well-being stipend program

It’s not uncommon to hit roadblocks when rolling out a wellness program. Here are some common challenges you may encounter, with tips on course-correcting your strategy. 

Adjusting company culture to complement your wellness stipend program 

Health and wellness stipends aren’t a standalone tool you can use to overhaul employee well-being. Gareth Fryer, Co-CEO of HR company Fika, explains that the foundations of a healthy workplace must be there for your wellness initiatives to be effective: 

“An organization’s duty of care starts with addressing root causes of declining well-being in the workplace. The key thing is that a positive impact for every employee at work can be made by the environment, the structures, the culture, the reward systems.” 

Prioritizing well-being initiatives should be embedded into the core of your business practices. Use your wellness stipend to incentivize the desired behavior change as needed. 

Encouraging employee participation and engagement

Employees don’t always make use of eligible benefits, especially if they don’t believe they’re relevant to them. Communication can be an issue here if employees don’t know how to access the benefits, or if the platform is too complicated to use. 

Another problem occurs when companies are guilty of wellness washing — the practice of appearing to care about employee well-being without actually caring. In a UK survey of 1,000 employees, 71% of companies celebrated mental health awareness days, but only 36% boasted “good” or “outstanding” psychological well-being support as voted by employees. 

Bex Spiller, Founder of the Anti-Burnout Club, explains that something as simple as scheduling can significantly impact employee participation. She said: 

“One of the most important points is to give your employees the time to take part in whatever new wellness programs you bring in — and that doesn’t mean during their lunch break. Start fostering a culture of well-being in the organization with dedicated time for your teams to take care of themselves.”

Ensuring program sustainability and effectiveness

Your wellness program must be forward-facing, focused on the future of employee well-being, and shareable with employees. “Having a clear comms roadmap that includes benchmarking and progress measurement from the outset is essential,” says Caroline Ferguson, Organizational Mindset Specialist for Mindsetter Ltd.

Regularly evaluating the program’s overall success is also essential to measure long-term ROI. Collect employee feedback to understand the effectiveness of your program on engagement, productivity, and your overall health and wellness culture.

Dealing with budget constraints and ROI considerations

Cutbacks, inflation, and the overall economy are all top of mind for companies, which can cause problems when budgeting for a wellness program. This is a problem that resonates with Isaac Robertson, Co-Founder of Total Shape, who told us: 

“One of the challenges we faced was ensuring that the healthcare stipend program was sustainable and financially feasible for our company. We worked closely with our HR and finance teams to find a balance between offering generous benefits and keeping costs under control.”

Remember that benefits budgeting is never a one-time task but something to revisit throughout the year. Keep checking in with your employees to determine the return on your investment, measure progress toward your benefits goals, and benchmark your program against competitors. 

Pro tip: By opting for a flexible stipend account, you’ll stretch your benefit dollars further. You can consolidate various existing wellness programs under one account to save time and budget. Allowing employees to spend on a wide variety of wellness expenses also makes these accounts feel like 10 benefits (or however many categories you allow) in one.

Support your employees holistically with Benepass

Wellness stipends are a flexible way to care for your employees’ health and well-being. By doing so, you're supporting your individual workers and setting your business up for success by creating an environment where they’ll thrive.

Benepass makes it easy to nurture a supportive culture with our stress-free benefits platform. Implement your well-being program and give employees access to numerous categories to cover their personalized wellness expenses. Most companies choose to set up a wellness stipend through a taxable lifestyle spending account that Benepass can create in four easy steps:

  1. Choose your program: Design your wellness stipend by setting the amount and eligible spend categories. 
  2. Implement your policy: We set up your personalized benefit policy and send your employees Visa cards.
  3. Connect to payroll: Automate enrollment by connecting your payroll system.
  4. Join the Benepass platform: Invite your employees to start spending their wellness stipend.
Benepass Web App

Ready to give employee health and wellness a much-needed boost? Book a demo of Benepass today or contact sales@getbenepass.com for more details. Read up on other stipends that can complement a WFH stipend and further support employee well-being:

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Rebecca Noori

Rebecca Noori is a freelance HR Tech and SaaS writer who is obsessed with our world of work. She writes about everything from employee benefits and performance management to upskilling and productivity tips. When she's not writing, you'll find her grappling with phonics homework and football kits, looking after her three kids.

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